How to save 99% of your fixed costs today – Chemists and Distributors

It is the classic chicken and egg scenario – which comes first? 

Rapid changes in the distribution and retailing for Chemists in the USA show a pathway for Australia. 

How It Works

  • The customer saves an hour or more getting back and forth and waiting at a traditional pharmacy into a minute on the phone. (further reduces covid transmission)
  • Doctors email prescriptions and patients use the mobile app and website for refills.
  • A pharmacy person contacts the patient by phone to set up delivery, take payment, add on any non-prescription products and answer any medication questions. 
  • A pharmacy employee delivers the prescription in hours for free. 

Competitive Advantages

There are several competitive advantages over traditional pharmacies that provide a sustainable defence. 

  1. The distribution-chemist business model services the same area as twenty traditional pharmacies.
  2. Free same-day delivery removes the need for prime retail storefronts. 
  3. As a result, the fixed overhead costs fall by 99% to less than 1% of a typical large chemist retail chain.
  4. Geographic expansion is faster and lower cost using the distribution model vs. the traditional chemist model. 
  5. The business at its heart is a SAAS model -after the initial cost of the software, it requires zero capital expenditure as you scale up the network. 

How does the growth strategy work? 

  1. Doctors’ education and sign up: sales team sets appointments to promote the benefits for their patients and their practice – digitised and audit trail. 
  2. Significant investment in multi-social media platforms with organic messaging and paid advertising – #socialselling
  3. As one geographic area reaches peak market share, the next area begins.

Was it the chicken or egg? – does the distributor become a chemist – does the chemist become a distributor? 

What is the current growth rate? 

  • 1,200% revenue growth from Q1 to Q4 in 2021
  • 90% YoY Growth

Which business are we discussing?

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If you have read this far, thank you for your attention. It means a lot. I hope this helped you even a little bit in better making sense of this topic. If so, please share it with a friend who might also benefit from it. 

Thanks for reading,